Or der: 20 1 3

- 2

- 24
Served : February 25 , 20 1 3



### UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation
on the 25 th of February , 20 1 3

Essential Air S ervice at

JONESBORO
, ARKANSAS

under 49 U.S.C. 41731 et seq. Docket DOT

- OST

- 1997

- 2935

ORDER EXTENDING SERVICE PERIOD

Summary By this O rder

, the Department is extending the service period for Multi

- Aero, Inc. d/b/a Air
Choice One ( Air Choice One ) to provide subsidized E ssential A ir S ervice (EAS) at Jonesboro

, Arkansas

, for a one

- year period

, from March 1, 2013, through February 28, 2014

. 1 Air Choice
One will continue to provide Jonesboro with 1 8 nonstop round trips per week to Lambert

- St.
Louis International Airport (St. Louis) using 9

- passenger Cessna Grand Caravan aircraft

, at an annual subsidy rate of $1,717,781

.

Background By Order 20 11

- 12

- 1 4 ( December 22, 2011 ) , the Department selected Air Choice One to provide
1 8 nonstop round trips per week from Jonesboro to St. Louis using a 9

- passenger Cessna Grand Caravan, for one year beginning when the carrier inaugurated service through the end of the 1 2 th

month thereafter

, at a n annual subsidy rate of $1,717,781

. Air Choice One inaugurated service at
Jonesboro on February 13, 2012 , thus setting an expiration date of February 28, 2013

.

Public Law 112

- 27, signed into law on August 5, 2011, amended the d efinition of “eligible place” for the purpose of receiving EAS. See 49 U.S.C. § 41731. Th at amendment state d that to be eligible, a community must be located not less than 90 miles from the nearest medium or large hub airport and must have had an average subsidy per passenger of less than $1,000 , regardless

1 Subsidy is calculated and distributed on a fiscal year basis, subject to the availability of funds.of isolation, during the most recent fiscal year, as determined by the Secretary of Transportation. Section 41731, as amended, also grant ed the Secretary the authority to issue a waiver of the 90

- mile criterion if the Secretary determines that the “geographic characteristics of the location result in undue difficulty in accessing the nearest medium or large hub airport.” 49 U.S.C. § 41731(d). At the time when that amendment was in effect, the Department was deciding on a long

- term carrier selection at Jonesboro . Because Jonesboro is only about 82 miles from Memphis International Airport (MEM), a medium hub, Jonesboro ’s eligibility to receive d subsidized EAS was affected by the amendment.

Subsequently, The Federal Aviation Administration (FAA) Modernization and Reform Act of
2012 ( Public Law 112

- 95 ) , signed into law February 14, 2012, made amendments to the EAS

statute , including the removal of the 90

- mile restriction , but not the $1,000 per passenger cap

. At the time, t he Department was preparing a Notice of Proposed Rulemaking regarding the new
waiver provisions under 49 U.S.C. § 41731, a nd Jonesboro could have been affected. As a result, Air Choice One was selected to serve Jonesboro for only a one

- year period, rather than a typical two

- year period.

Legislative Changes Which May Affect Future EAS Eligibility at Jonesboro
P ublic Law 112

- 95 amended 49 U.S.C. § 41731(a)(1)(B) to change the d efinition of “eligible place” for the purpose of receiving EAS. The amendment states that to be eligible, a community must maintain an average of 10 enplanements or more per service day, as determined by the Secretary, during the most recent fiscal year b eginning after September 30, 2012. 2 The legislation exempts locations in Alaska and Hawaii and communities that are more than 175 driving miles from the nearest large or medium hub airport. Jonesboro must meet the
10

- enplanement

- a

- day threshold for EAS to continue after FY2013 or otherwise face termination of its eligibility to receive EAS, barring a waiver from the Secretary.

In the most recent fiscal year for which data are available, FY2012 (October 2011

- September 2012), Jonesboro genera ted a total of 7,034 passengers (inbound and outbound), or an average of
11.2 enplanements per day. 3 The community and carrier will need to continue to attract enough passengers to meet the 10 enplanements per day statutory requirement in order for Jonesboro to remain eligible to continue receiving EAS after FY2013. The Department will continue to monitor Jonesboro’s eligibility to receive EA S in the light of these new requirements throughout the life of any executed contract. The Department may cancel a contract for any community receiving EAS if enplanements remain below an average of 10 per day during FY2013.

Decision
Because Jonesboro ’s continued eligibility was in flux at the time of the carrier

- selection Order in December 2011, and because Air Choice One and the community have significantly increased

passenger usage since the carrier inaugurated service , we will extend Air Choice One ’s service

2 The Secretary also has authority to waive the 10

- passenger requirement, on an annual basis, if the community can demonstrate that the reason the location averages fewer than 10 passengers per day is due to a temporary decline in enplanements. See 49 U.S.C. § 41731(e). A detailed explanation of the temporary decline would have to be
submitted to the Department with relevant supporting documents.

3 Source: Bureau of Transportation Statistics; Form 41, Schedule T

- 100. Daily averages are based on one

- half of the O&D passengers, divided by 313 service days (314 during leap years).period for an additional 12 months, through February 28, 2014 . We will set the rate for this second year, at an annual subsidy of $1,717,781

, as described in Air Choice One ’s original proposal of a year ago. 4

Later this year, using FY2013 pass enger data, the Department will evaluate the 10 enplanement

per

- day threshold and take appropriate action at that time regarding Jonesboro ’s continued eligibility in the EAS program. We note that Air Choice One project ed 4,700 passengers annually using it s Jonesboro service , which is lower than 10

- enplanement threshold

. However, the carrier exceeded that projection by a significant margin and is on track for over 10,000 5

passengers annually to utilize the service.

In light of the eligibility criteria that Jonesboro must meet in order to maintain its subsidized air service, we urge Air Choice One and the community to continue to maximize use of the service
awarded under this Order to the greatest extent possible in o rder to avoid termination from the EAS program. 6

This Order is issued unde r authority delegated in 49 CFR Part 1.56a(f).

ACCORDINGLY,
1. We select Multi

- Aero, Inc. d/b/a Air Choice One , to provide Essential Air S ervice at
Jonesboro

, Arkansas ; for addit ional 12 months, from March 1, 2013, through February 28, 2014 ;

2 . We set the final rate of compensation for Multi

- Aero, Inc. d/b/a Air Choice One

, for the provision of Essential A ir S ervice at Jonesboro

, Arkansas

, as described in Appendix D ;

3

. The Department directs Multi

- Aero, Inc. d/b/a Air Choice One to retain all books, records, and other source and summary documentation to support claims for payment, and to preserve and maintain such documentation in a manner that readily permits its audit and examination by representatives of the Department. Such documentation shall be retained for seven years from when EAS begins or until the Department indicates that the records may be destroyed, whichever comes first. Copies of flight logs for aircraft sold or disposed of must be retained. The carrier may forfeit its compensation for any claim that is not supported under the terms of this Order;

4

. Th is docket will remain open until further order of the Department; and

4 See Appendix C. Air Choice One ’s full proposal may be accessed at www.regulations.gov using “DOT

- OST

1997

- 2935 ” in the search field.

5 Estimated number of enplanements and d eplanements based on 8 full months of Air Choice One’s service (6,948 passengers divided by 8 multiplied by 12)

6 In addition, the Department is prohibited from subsidizing air service at a community where the subsidy per passenger exceeds $200, unless the community is more than 210 highway miles from the nearest large or medium hub airport , which is not the case with Jonesboro. Congress first established the $200 ceiling under P.L. 101

- 164 for fiscal year 1990, and reestablished it in fiscal years 1994

- 1999. The ceiling was made permanent by P.L. 106

- 69, the Department of Transportation and Related Agencies Appropriations Act of 2000.5

. We will serve copies of this Order on the Mayor of Jonesboro, the Airport Manager of Jonesboro Municipal Airport, and Multi

- Aero, Inc. d/b/a Air Choice One.

By:

SUSAN L. KURLAND Assistant Secretary for
Aviation and International Affairs

(SEAL)

An electronic version of this document is available at http://www.regulations.govAppendix A



## AREA MAP

This map is provided by Planet Profitability Forecasting System and is being used with express permission of the copyright holder, Sabre Airline Solutions®.Appendix B

Jonesboro

, AR (JBR) Passenger traffic

Year Month Carrier Inbound pax Outbound pax Totals

2010 1 SeaPort Airlines, Inc. 24 37 61

2010 2 SeaPort Airlines, Inc. 19 38 57

2010 3 SeaPort Airlines, Inc. 28 45 73

2010 4 SeaPort Airlines, Inc. 28 36 64

2010 5 SeaPort Airlines, Inc. 36 37 73

2010 6 SeaPort Airlines, Inc. 36 38 74

2010 7 SeaPort Airlines, Inc. 29 43 72

2010 8 SeaPort Airlines, Inc. 34 33 67

2010 9 SeaPort Airlines, Inc. 65 58 123

2010 10 SeaPort Airlines, Inc. 39 40 79

2010 11 SeaPort Airlines, Inc. 36 61 97

2010 12 SeaPort Airlines, Inc. 51 49 100

2011 1 SeaPort Airlines, Inc. 43 30 73

2011 2 SeaPort Airlines, Inc. 42 52 94

2011 3 SeaPort Airlines, Inc. 64 78 142

2011 4 SeaPort Airlines, Inc. 69 81 150

2011 5 SeaPort Airlines, Inc. 101 133 234

2011 6 SeaPort Airlines, Inc. 110 110 220

2011 7 SeaPort Airlines, Inc. 107 132 239

2011 8 SeaPort Airlines, Inc. 93 104 197

2011 9 SeaPort Airlines, Inc. 89 80 169

2011 10 SeaPort Airlines, Inc. 63 80 143

2011 11 SeaPort Airlines, Inc. 247 234 481

2011 12 SeaPort Airlines, Inc. 28 47 75

2012 1 SeaPort Airlines, Inc. 34 25 59

2012 2 SeaPort Airlines, Inc. 13 10 23

2012 2 Multi-Aero, Inc. d/b/a Air Choice One 127 122 249

2012 3 Multi-Aero, Inc. d/b/a Air Choice One 340 351 691

2012 4 Multi-Aero, Inc. d/b/a Air Choice One 328 364 692

2012 5 Multi-Aero, Inc. d/b/a Air Choice One 430 447 877

2012 6 Multi-Aero, Inc. d/b/a Air Choice One 398 465 863

2012 7 Multi-Aero, Inc. d/b/a Air Choice One 522 560 1,082

2012 8 Multi-Aero, Inc. d/b/a Air Choice One 487 543 1,030

2012 9 Multi-Aero, Inc. d/b/a Air Choice One 349 420 769

2012 10 Multi-Aero, Inc. d/b/a Air Choice One 476 468 944

7,835
7,034
10,422 Passenger traffic (last 12 months; Nov2011-Oct2012) FY2012 traffic (Oct2011-Sep2012) Annualized traffic (one full year of Air Choice One's service)

Source: USDOT Bureau of Transportation Statistics, TranStats Intermodal Database, Schedule T

- 100.Appendix CAppendix D

Multi

- Aero, Inc. d/b/a Air Choice One
Essential Air Service to be provided at Jonesboro , Arkansas

Effective Period : March 1, 2013, through February 28, 2014
Scheduled Service : 3 nonstop round trips each weekday (Monday through Friday) and 3 nonstop round trips each weekend (18 total round trips per week) t o Lambert

- St. Louis International Airport (STL)
Aircraft : Cessna Grand Caravan

, 9 seats Rate per Eligible Flight 1 : $ 936 Weekly Ceilin g 2 : $ 33,696

Note: The carrier understands that it may forfeit its compensation for any flights that it does not operate in conformance with the terms and stipulations of the rate Order , including the service plans outlined in the Order and any other significant elements of the required service, without prior approval. The carrier understands that an
aircraft take

- off and landing at its scheduled destination constitutes a completed flig ht; absent an explanation supporting subsidy eligibility for a flight that has not been completed, such as certain weather cancellations, only completed flights are considered eligible for subsidy. In addition, if the carrier does not schedule or operate its flights in full conformance with the Order for a significant period, it may jeopardize its entire subsidy claim for the period in question. If the carrier contemplates any such changes beyond the scope of the Order during the applicable period of thes e rates, it must first notify the Office of Aviation Analysis in writing and receive written approval from the Department to be ensured of full compensation. Should circumstances warrant, the Department may locate and select a replacement carrier to provi de service on these routes. The carrier must complete all flights that can be safely operated; flights that overfly points for lack of traffic will not be compensated. In determining whether subsidy payment for a deviating flight should be adjusted or di sallowed, the Department will consider the extent to which the goals of the program are met and the extent of access to the national air transportation system provided to the community.

If the Department unilaterally, either partially or complete ly , termi nates or reduces payments for service or changes service requirements at a specific location provided for under this Order , then, at the end of the period for which the Department does make payments in the stipulated amounts or at the stipulated service le vels, the carrier may cease to provide service to that specific location without regard to any requirement for notice of such cessation. Those adjustments in the levels of subsidy and/or service that are mutually agreed to in writing by the Department and carrier do not constitute a total or partial reduction or cessation of payment.

Subsidy contracts are subject to, and incorporate by reference, relevant statutes and Department regulations, as they may be amended from time to time. However, any such sta tutes, regulations, or amendments thereto shall not operate to controvert the foregoing paragraph.

Funds may not be available for performance under this Order beyond March 27, 2013. The Government’s obligation for performance under this Order beyond March 27, 2013, is subject to the availability of funds from which pay ment for services can be made. No legal liability on the part of the Government for any payment may arise for performance under this Order beyond March 27, 2013, until fund s are made available to t he Department for performance. If funds are not made available for performance beyond March 27, 2013, the Department will provide notice in writing to the carrier.

All claims for payment must be submitted within 60 days of the last da y of service provided under this Order

.

1 Annual compensation of $1,717,781 , divided by 1,835 annual departures (36 weekly departures x 52 weeks x 98 percent completion)
2 36 flights per week multiplied by $ 936 p er flight.